The unabated trend of ultra-large container ship (ULCS) orders means the liner shipping industry will remain under pressure, said Italian broker Banchero Costa.
IHS Maritime’s Sea-web.com data show that deliveries for 2015 are expected to total 250 ships of 1,860,583 teu. Of these, 69 are ULCSs, including 10 vessels from Taiwanese carrier Yang Ming alone.
This compares with the delivery of 206 ships totalling 1,519,343 teu in 2014, including 60 ULCSs, suggesting fleet growth of over 22%.
However, trade growth has settled at single digits.
Global container ship trade growth has averaged 7.3% per year over the past five years. Trade grew by 6.2% in 2014 and is expected to grow a further 6.4% in 2015 to over 180 million teu.
Asia continues to dominate global container exports, accounting for 57% of global container exports in 2014. Asian exports reached over 70 million teu, up marginally from 2013 but up over 50% from 2011. Europe and North America accounted for a further 18 % and 10% of global exports, respectively, in 2014.
Asia also accounted for the largest share of global container imports in 2014 with 38%. Europe and North America accounted for 21% and 17% of global imports, respectively.
Banchero Costa commented, “The construction of ULCSs continued to gain momentum in 2015 with 28 units of over 12,000 teu ordered in the first four months of 2015 only.”
A number of operators have recently been in the market for 18 20,000 teu units including MOL with an order of six 20,150 teu ships and OOCL with an order of six 21,000 teu ships.
Banchero Costa commented, “Investment in ULCSs in order to maximise economies of scale and push down unit costs will result in the cascading of bigger ships on some trade lanes were the economics and other restrictions allow it. Moreover, larger vessels will intensify the need for increased port productivity, requiring investments from ports in infrastructure and equipment.”
As supply pressures grow, liners have been intensifying their alliances on major trade lanes.
Carriers consolidated their operations via both mergers and alliances in 2014; Hapag-Lloyd merged with CSAV to become the world’s fourth-largest carrier; after the P3 Alliance was shot down by Chinese anti-trust authorities, Maersk went on to form the 2M Alliance with MSC; and CMA-CGM, UASC, and China Shipping formed the Ocean Three Alliance.”